If the US proceeds with reciprocal tariffs on Indian products, key sectors such as agriculture, pharmaceuticals, machinery, electricals, and precious stones could face significant impacts, according to experts. These tariffs are expected due to the high tariff gap—the difference between the import duties imposed by India and the US on various products. The Trump administration is reportedly considering these measures to address trade imbalances, with the announcement expected early Wednesday morning (India time), which President Trump has described as a Liberation Day for the US.

Among the hardest-hit sectors would be agriculture, particularly fish, meat, and processed seafood. Shrimp exports, which account for 40% of Indias shipments to the US, face a tariff differential of 27.83%, making them less competitive. Industry experts warn that this could further strain Indian seafood exports, which already face anti-dumping and countervailing duties in the US. Other agricultural products likely to be affected include processed food, sugar, cocoa, cereals, vegetables, fruits, spices, dairy products, and edible oils. Dairy exports, in particular, could be severely impacted by a 38.23% tariff differential, making ghee, butter, and milk powder more expensive and reducing their market share in the US.

The industrial and manufacturing sectors are also expected to feel the effects of the tariffs. The pharmaceutical industry, India’s largest industrial export sector, valued at USD 12.72 billion, could see costs rise due to a 10.9% tariff differential, affecting the affordability of generic and specialty medicines in the US. Similarly, the jewelry sector, which includes diamonds, gold, and silver, faces a 13.32% tariff gap, likely increasing prices and reducing competitiveness in the US market. Exports of machinery, computers, electrical goods, textiles, rubber products, and ceramics are also at risk of becoming more expensive due to additional US duties.

While experts acknowledge the unpredictability of the Trump administrations trade policies, they warn that increased tariffs could create short-term challenges for Indian exporters, although the long-term impact remains uncertain. Some argue that the burden of these tariffs will ultimately fall on American consumers, as higher import costs may lead to price hikes in the US market. However, trade analysts suggest that the US may not base its tariff decisions solely on import duty differentials but could also consider other factors such as non-tariff barriers, VAT (GST), and currency fluctuations. This means that the final list of affected products and the extent of tariff increases could vary.

Disclaimer: This image is taken from Bloomberg.